The US Financial Accounting Standards Board (FASB) and the Private Company Council (PCC) have consults on first private company framework for evaluating financial accounting and reporting for private companies.
The framework, A guide for Evaluating Financial Accounting and Reporting for Private Companies, is intended to serve as a guide for the FASB and the PCC in determining when to provide alternative recognition, measurement, disclosure, display, effective date, or transition guidance for private companies reporting under US GAAP.
The proposed provisions are based on feedback from the FASB’s July 2012 consultation, which resulted in the standard setter and the PCC considering whether the same industry-specific guidance is relevant to users of the financial statements of both public companies and private companies.
It also now allows private companies to select the alternatives within US GAAP for recognition or measurement guidance that it deems appropriate.
FASB chairman Leslie Seidman said the proposed guide intends to "help the FASB and the PCC identify the unique needs of users of private company statements, while also reducing the complexity and cost of preparing those statements".
Deadline for comment on the proposal is 21 June.